Sunday, October 11, 2009: 11:30 AM
This paper uses a theoretical approach to answer two questions. By being too aggressive, a salesperson could irritate customers and hurt sales performance. This raises the question why some salespeople continue being pushy. In addition, why are salespeople in certain industries (such as cars and mattresses) notoriously aggressive, while salespeople in other industries (such as luxury boutiques) are relatively customer-oriented?
Using a theoretical model, this paper demonstrates that the optimal level of aggressiveness for salespeople is determined by the frequency at which transactions are repeated, the salesperson’s turnover rate, and the proportion of customers with a high willingness to pay. The analysis reveals that, other things being equal, the more frequently transactions are repeated, the lower the salesperson’s turnover rate, the larger the proportion of customers with a high willingness to pay, and the lower the optimal aggressiveness level. Additionally, if the frequency at which transactions are repeated is high, and/or if the proportion of customers with a high willingness to pay is large, then the higher the commission rate, and the lower the optimal aggressiveness level.
Using a theoretical model, this paper demonstrates that the optimal level of aggressiveness for salespeople is determined by the frequency at which transactions are repeated, the salesperson’s turnover rate, and the proportion of customers with a high willingness to pay. The analysis reveals that, other things being equal, the more frequently transactions are repeated, the lower the salesperson’s turnover rate, the larger the proportion of customers with a high willingness to pay, and the lower the optimal aggressiveness level. Additionally, if the frequency at which transactions are repeated is high, and/or if the proportion of customers with a high willingness to pay is large, then the higher the commission rate, and the lower the optimal aggressiveness level.